Quantitative Easing (QE) is now shorthand for many different things, depending on which banker, academic, politician or journalist is using it. If ever there was term that was coined to mean just one thing in macroeconomics and was then used to mean much else except that one thing, it was QE.
Fair enough. Definition is all. Beware beguiling phrases which have multiple meanings. In the book Through the Looking-Glass and what Alice found there by Lewis Carroll:
Humpty Dumpty: 'When I use a word it means just what I choose it to mean - neither more nor less'.
Alice: 'The question is whether you can make words mean so many different things.'
Alice, as usual in Looking-Glass land struggles to keep up with HD, who as far out of his depth as always, has changed the subject. Alice suggests that HD's definition of 'impenetrability'
is ' a great deal to make one word mean' . Whereupon:
Humpty Dumpty: When I make a word do a lot of work like that I always pay it extra.'
What Carroll portrays is the struggle we may have with some aspects of reality. Say, the way politics, media and economics intertwine which can appear highly confusing. Just what reality are they all seeing? Are they Humpty Dumpties who just keep moving the viewpoint for a quieter life? Are they ignorant, or perverse?
So with QE? Why did the Bank of Japan use this term that was coined to be a very hopeful method of bringing new economic life, and then fail to use its essential dynamic? This seminar presented by Professor Richard Werner (inventor of the term Quantitative Easing) 6pm Thursday 28th October at Southampton University should at least define what he intended it to mean.
posted by Charles Bazlinton